The Minerals Depletion Allowance: Its Effect On Future Supply And Financing

During the past five years, the mining industry has been subjected to new operating constraints that are unprecedented in number, scope, and urgency. The industry must operate in a safer, cleaner manner, yet produce more without large price increases. Compliance with any new sweeping legislation is always difficult-and particularly so in today's adverse economic climate, which is being aggravated by the steady stream of environmental control and tax-reform programs. In effect, while government is unwittingly but surely undercutting the country's productive capabilities, it blames industry for the resulting failure to meet consumer demand. Any such real or alleged failure then brings heightened bitterness from Congress. During the recent energy shortage, for instance, threats of nationalization were ventilated in public along with proposals to abolish the mineral depletion allowance.